Saturday, December 3, 2016

Fact File –II (Note Bandi) 04th Dec., 2016

Narendra Modi Demonetization or Demonization / jkgr ;k vkQr

Experts View :
Narendra Modi takes a great leap backwards. Mao would approve
In 1958, Chairman Mao ordered that that all sparrows over China should be put to death. It was halled as a necessary step by a strong leader. Farmers were suffering because sparrows tended to eat their grain seeds. Thus began The Great Sparrow Campaign. A countless number of unintended consequences. Sparrows ate locusts, and once the balance in the ecosystem changed, locusts proliferated and destroyed China’s crops. There was famine, hunger, strvation: no less than 45 million people died in the three years following Mao’s orders At the start, Mao exhorted them to bear with the in-convenience. But then the pain piled up.

Narendra Modi’s demonetization old 1000 and 500 rupee notes is one such folly, a blunder in every imaginable way. It doesn’t achieve its intended purpose. And its unintended consequences could deyastate the lives of the poor and cripple our economy.

Corruption and black money are consequence of big government, of one set of individuals having discretionary powers over the actions of others. If Modi was serious about tacking black money, he’d bring about institutional changes that would take us towards the minimum government he had promised in his 2014 compaign. Instead, government keeps getting bigger, controlling more and more of our livers. More government = more corruption.

Apart from all the individual suffering, our economy is being eviscerated. Cash is integral to most of the economy Farmers are unable to sell perishable produce, to buy grains for the new harvest or to pay labourers. Transporters are unable to transport goods across distances. Commerce has shut down in many places, with small business going bust. In some places, the barter system is back, as if we’ve gone centuries back in time.

Even if implementation was perfect, this would be a historic blunder because social engineering never works and carries moral costs because of its unintended consequences.

Amit Verma – An economist

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